Plans to convert the defunct Parsi Lying-In Hospital in Fort into a super-specialty orthopaedic and sports medicine centre has been rejected by the Bombay Parsi Punchayet (BPP), the lease-holder of the century-old property.

In March, the hospital’s managing committee had signed a memorandum with Krimson Healthcare, a health services company, to create a 30-year lease for a 110-bed facility at an annual lease of Rs1 crore, but the BPP which has to give the final nod rejected the deal earlier this month, saying that the committee was not authorised to sign the agreement.

Dinshaw Mehta, chairperson of the BPP, said: “The proposal is a sell-out because a property worth Rs100 crore is being leased out for an annual rent of Rs1 crore. The managing committee signed the agreement in March and informed us only in September. They do not have the power to sign any agreement as we are the owners of the hospital.”

Mehta said that the hospital’s managing committee had signed an agreement without calling for public bids to lease the property. The Parsi Lying-In hospital was inaugurated in March 1893. Built at a cost of just over Rs1 lakh, it was built like European maternity hospitals where new mothers were cared for a few weeks after child birth. But as the Parsi-Zoroastrian community’s birth rate plummeted, the hospital was closed down. There were attempts to put it to other use, including a proposal to make it an extension of a neighbouring school.The managing committee had said that since the property was lying unused for more than a decade, the orthopaedic hospital was a good idea. Committee members were not available for comment.

Dr Prakash Khubchandani of Krimson Healthcare said that the 99-year-old lease for the hospital expired in 1992. “We are renewing the lease. We are keen to continue with the project. We have worked on it. Doctors from India and from Cedar Sinai Hospital in Los Angeles are involved in the project and we have also appointed heritage experts as the building is heritage listed.”

“The terms of agreement are well defined and it has the permission of the charity commissioner. It is not that we are just paying Rs1 crore as lease. We will be spending nearly Rs100 crore to develop the hospital and will also pay annual lease rent to the government besides share the revenue with the trust,” Khubchandani said.

“The two trusts are having a meeting on the issue. It is up to them to resolve the problem.”When the project was announced, there were fears among Parsi-Zoroastrians that it will not benefit them, but Krimson Healthcare has said that the hospital will revert back to the community after the end of the lease period.